The public infrastructure industry is so vast, so complex that it has its own nomenclature and is the source of a never-ending debate over how to deliver the best projects to taxpayers for the least tax money.

This toolkit is intended to make it easy for you to get the information you need to understand the various models used to finance public projects.

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bid

Competitive Bid

competitive bid: A component of the design-bid-build process of project delivery whereby qualified private construction firms bid for a government project. The bidder with the lowest cost is awarded the contract, based on a set of plans and specifications provided by the public agency. See: design-bid-build; design-build; no-bid contract.

Construction Manager / General Contractor (CM/GC)

construction Manager/general Contractor (CM/GC): A project delivery method that seeks input from a construction manager during the design phase. The Construction Manager is generally selected on the basis of qualifications, past experience or a best-value basis. Scheduling, prices, phasing and other consultation the construction manager provides is intended to help the public agency plan a more constructible project. Toward the end of the design process, the agency and the construction manager may negotiate a guaranteed maximum price for the construction of the project based on the defined scope and schedule. If both sides agree, they execute a contract to build the project, and the construction manager becomes the general contractor. The CM/GC delivery method is also called the Construction Manager at-Risk (CMR) method in some states.

Design-Bid-Build

design-bid-build (DBB): the contracting agency either performs the design work in-house or negotiates with an engineering design firm to prepare drawings and specifications under a design services contract, and then separately contracts for at-risk construction by engaging a contractor through competitive bidding. Under this arrangement, the contracting agency warrants to the contractor that the drawings and specifications are complete and free from error (contracting agency takes the risk). The selection process for design-bid-build is usually based on negotiated terms for the design contract and lowest responsible bid for the construction contract.. See: competitive bid; design-build; no-bid contract.

Design-Build (DB)

design-build (DB): A project delivery system of contracting whereby one entity performs both architectural/engineering and construction under one single contract. Under this arrangement, the design-builder warrants to the contracting agency that it will produce design documents that are complete and free from error. The selection process under design-build contracting can be in the form of a negotiated process involving one or more contracts, or a competitive process based on some combination of price, duration, and proposer qualifications. Portions of the overall design or construction work can be performed by the design-build entity or subcontracted out to other companies that may or may not be part of the design-build team. See: competitive bid; design-bid-build; no-bid contract.

design-build-operate-maintain (DBOM)

design-build-operate-maintain (DBOM): A project delivery and maintenance system in which the contractor designs, constructs, operates, and maintains the facility for a specified period of time, whereby payment beyond project completion is predicated on meeting certain prescribed performance standards relating to physical condition, capacity, congestion, and/or ride quality. This is an extension of design-build that provides an inherent incentive for the design-builder to provide a better quality plan and project by creating a lifecycle responsibility and accountability for the performance of the facility by the design-builder.

High Occupancy Vehicle (HOV)

High Occupancy Vehicle (HOV) lane: An HOV lane, sometimes called a carpool lane, is a special lane reserved for the use of carpools, vanpools and buses. They are usually located next to the regular, or unrestricted, lanes. These special lanes enable those who carpool or ride the bus to bypass the traffic in the adjacent, unrestricted (“general purpose”) lanes. Lanes are identified as “2+” or “3+” which refers to the minimum number of occupants to qualify.

Infrastructure

Metropolitan Planning Organization (MPO)

Metropolitan Planning Organization (MPO): Federal transportation legislation requires that a Metropolitan Planning Organization (MPO) be designated for each urbanized area with a population of more than 50,000 people in order to carry out the metropolitan transportation planning process, as a condition of Federal aid. See: RTPA.

Project

project: A proposed or in-process development such as a highway, bridge, water delivery system, rail line or power station. Projects require funding, design, construction and inspection. See: design-build;design-bid-build; devolution; no-bid contract.

Public-Private Partnership (PPP/P3)

public-private partnership (PPP/P3): Public-private partnerships between a government agency and private-sector company can be used to finance, build and operate projects, such as roads and bridges, public transportation networks, parks and convention centers. The projects often begin with outsourcing the design and building of the project (see design-build), before the contractor or an affiliate takes over the finished project’s operations. To recoup its cost and turn a profit, the contractor may collect tolls or charge some other fees for a number of years. If the revenues don’t materialize, the company can raise the tolls and fees – which may further tamp down traffic on the toll road. Several P3 projects have filed bankruptcy and stuck taxpayers with unpaid debts.

Regional Transportation Planning Agency (RTPA)

Transportation Infrastructure Finance and Innovation Act (TIFIA)

Transportation Infrastructure Finance and Innovation Act (TIFIA): A federal loan program established by Congress in 1998 that provides credit assistance for qualified projects of regional and national significance. The program is intended to “fill market gaps,” according to the Department of Transportation’s website, “and leverage substantial private co-investment by providing supplemental and subordinate capital.”